How to scale your business?
When we start a business, we dream big! We want to be recognized and referred to quickly. We imagine that we will get rich and famous. However, once we start and launch our business, we often feel stuck and overwhelmed because we have to learn new skills and manage different aspects of our business that we are not familiar with. Once we settle and see our revenues grow, we want to grow bigger. The first thing we hear when we want to scale up is to invest more in PR, Marketing, and Sales. Once we invest in Marketing and PR efforts, we realize that we are feeling overwhelmed and stuck again.
There are many reasons for that: the first reason could be that your business wasn’t ready for more clients or orders. You started getting more sales but you couldn’t keep up and manage properly. Either the quality was affected or the delivery time wasn’t respected. As a result, you suffered from bad word of mouth and a higher rate of customer complaints, and now you don’t know what to do. You might also have drastically increased your costs and are now running out of cash.
The second reason could be that you invested heavily in Marketing and PR, but you didn’t get the expected outcome, i.e., not enough sales. This can be explained by many factors, such as your service or product not responding to a need, not targeting the right market, or your service and products needing improvement.
Did you know there is a difference between scaling up and growing a business? We use those words interchangeably, but there is a difference. The main difference is that growing a business means you get more revenues by incurring more costs. Scaling up a business means you generate more sales while keeping your costs low. We all want to scale up our businesses to be sustainable and profitable.
There are different ways a business can scale up, but not all strategies can be a good fit. It depends on many factors such as the stage of the business, its capacity, etc. It is essential to study carefully and assess the current situation of the business to know which strategy will be more suitable.
There are four main growth strategies which are:
The first strategy is to sell existing products or services in existing markets. This strategy focuses on increasing your market share by acquiring new customers from your competitors.
The second strategy is to increase the sales of your offering in new markets, markets that you haven’t explored yet. It could be expanding geographically or targeting a new customer segment.
The third strategy is to launch or create a new product or service in an existing market. Your target audience is familiar with your current offering but wants or needs something else.
The fourth strategy is to launch a new offering in a new market. This strategy is mainly based on a lot of research and analysis, to understand the new target audience and create a new offering that will fit.
My recommendation would be to make sure that your business is ready to scale up. Ask yourself the following questions to know if your business is ready to move to the next level:
Have you built a strong foundation for your business to be prepared to scale up?
In case you get more sales, is your business ready to deliver all those orders or services?
If you answered no to any of the above questions, stop everything you are doing and start working on getting your business ready to grow.
As you can see, there is a lot of work to do before choosing which strategy will be the most appropriate. You need to assess your current capacity, the risks involved, and the resources needed, as well as, draft a plan to ensure you will be well prepared.
I would recommend the following steps to scale up a business:
Evaluate and improve business processes: Look at ways to improve how you are doing things. Put business processes in place and improve them to reduce costs, improve customer service, and reduce delays. You need to be consistent in delivering a standardized process for your products or services.
Assess resources: Look at the resources needed to deliver higher volumes.
Record, maintain, and analyze financial statements: Record, maintain, and analyze your financial statements to make the right decisions based on your current financial situation.
Create an action plan: Put a plan in place to execute those changes.
Implement the plan: You won’t see any results if you don’t implement the plan you created. You need to put in place an action plan to ensure that you will execute your plan and monitor your progress to adapt accordingly.
To scale up a business, you need to consider the following factors:
Organization: You need to be organized.
Consistency: You need to be consistent.
Customer-centric approach: You need to listen to your customers and optimize your customer experience and customer service to keep your loyal customers.
Business processes: You need to put business processes in place.
Vision: You need to have a vision for your business and make sure there is alignment between your strategy and operations.
Flexibility: You need to be flexible and adapt quickly to changes.
Financial resources: You need financial resources.
Expertise: You need to have the expertise needed (hire the right team).
Perfect your offering: You need to perfect your offering.
Have a plan: You need to have a plan.
Here are some mistakes to avoid when scaling a business:
Not focusing on consistency and quality: You need to be customer-centric. To develop a strong customer base, you need to offer consistent quality for your products or services. You also need to optimize your customer experience and customer service to keep your loyal customers.
Growing or scaling too fast: It takes time, and you shouldn’t rush and grow too fast. You want to have steady growth and a sustainable business. You don’t want to risk losing customers and having bad word of mouth.
Failing to hire the right employees: It will cost you a lot if you hire the wrong employees as you rush. You need to ensure that you hire a team who shares your values and vision.
Not building a strong foundation for your business: You need to have a solid structure from the start. For example, you need to have processes in place, a strategy, and a vision. You also need to record and maintain your financial statements to know your financial status at any point in time to make the right decisions.
It is important to mention that there is no one size fits all strategy. Your business has specific needs; you need to work around that instead of trying to do it like everybody else, which is the perfect recipe for disaster. Running and growing a business need time and effort. Don’t try to grow fast as it requires time. You need time to have a name in the market, a loyal customer base, and a reliable supply chain. You need to create a plan, evaluate the risks, make realistic financial forecasts, set goals, put in place metrics, and monitor your progress frequently to make adjustments when and where needed. Don’t be afraid to ask for external help when needed!
If you need help with your business, feel free to send us an email at info@businesschallenges.net or book a free business consultation here.